https://fortune.com/2023/11/16/new-york-may-ban-noncompete-employment-agreements-wall-street-not-happy-kathy-hochul/

  * Home
  * News
  * Tech
  * Finance
  * Leadership
  * Well
  * Recommends
  * Fortune 500

Home Page
Already have an account?SIGN IN
SEARCHSubscribe Now

  * Sections
      + FORTUNE 500
      + News
      + Europe
      + Tech
          o AI
      + Finance
          o Personal Finance
          o Real Estate
          o Crypto
      + Leadership
          o Success
      + Well
          o Life
          o Health
          o Mind
          o Family
          o Aging Well
      + Recommends
          o Credit Cards
          o Banking
          o Insurance
          o Mortgages
          o Investing
          o Loans
      + Education
      + Video
  * Rankings
      + FORTUNE 500
      + GLOBAL 500
      + MOST POWERFUL WOMEN
      + GREAT PLACE TO WORK LISTS
      + BEST MBA PROGRAMS
      + MORE RANKINGS
  * Analytics
  * Newsletters
  * Magazine
      + October/November 2023
      + August/September 2023
      + June/July 2023
      + April/May 2023
      + February/March 2023
      + December 2022/January 2023
  * Live Media
  * CEO Initiative
  * Connect

Success *New York

New York may ban noncompete employment agreements and Wall Street is
not happy

BYMaysoon Khan and The Associated Press
 
 
 
 
[AP23319741][AP23319741]
Gov. Kathy Hochul hasn't said whether she intends to sign the
legislation, which has come under a fierce attack by business groups.
Yuki Iwamura--AP

When people think of noncompete agreements, they usually think of
corporate executives with knowledge of prized trade secrets, whose
lavish pay packages often come with a condition that if they quit or
get fired, they can't go work for an industry rival.

More and more, though, employers are requiring regular workers to
sign those deals. About 1 in 5 American workers, nearly 30 million
people, are bound by noncompete agreements, according to the Federal
Trade Commission.

Horror stories about companies using noncompete agreements to trap
workers in middling jobs or punish them for taking their skills
elsewhere for better pay prompted New York legislators to pass a bill
last June that would ban noncompete agreements.

Five months later, though, Gov. Kathy Hochul hasn't said whether she
intends to sign the legislation, which has come under a fierce attack
by business groups.

The Public Policy Institute of the State of New York, an affiliate of
the Business Council of New York, launched a $1 million ad campaign
last month in an attempt to thwart the legislation. Some of the
loudest opposition has come from Wall Street, where firms see
noncompete agreements as important to protecting investment
strategies and keeping highly-paid workers from walking out with
valuable inside information.

Supporters of the ban say it would help people like lighting designer
Richard Tatum, a New York City resident who had signed a noncompete
agreement and spent a year fighting a former employer in court after
they sued him for getting another job shortly after they laid him off
in 2009. He had a family to support and wasn't moving or leaving his
industry, he said.

"I felt I had no choice but to fight," said Tatum, who now works for
an event production company. He said he understands being fired
during the financial meltdown. "But the fact that I had to spend a
year fighting off my former employer was just wrong."

A handful of states, including California, already ban noncompete
agreements. Other states, including Minnesota and Oklahoma, have laws
that void noncompete agreements if a person is laid off.

The Federal Trade Commission proposed a regulation in January banning
noncompete agreements, arguing that they hurt workers. President Joe
Biden said at the time that the agreements "block millions of retail
workers, construction workers and other working folks from taking
better jobs and getting better pay and benefits in the same field."

If signed by Hochul, a Democrat, the New York bill would only affect
noncompete agreements signed after the law goes into effect. The
legislation would not restrict nondisclosure agreements.

Hochul's office said she's still reviewing the legislation. She has
until the end of the year to make a decision.

Business groups say the ban shouldn't apply to certain industries and
job levels, like top executives or partners in tech companies or law
firms. They also said it could push employers to ship jobs to states
like Florida and Texas that do not have similar laws.

"This bill poses a serious risk to innovation and job growth and, if
enacted, could unravel the delicate balance between protecting
business investment and fostering a competitive job market," said
Paul Zuber, the executive vice president for the Business Council of
New York.

Advocates for the bill argue that striking noncompete agreements will
actually be good for innovation.

State Senator Sean Ryan, a Democrat who sponsored the bill, pointed
to Silicon Valley in California, a hub for tech companies.

"All the flexibility you see in that economy would have been dashed
had they made it so you couldn't go work for an emerging tech
company," Ryan said.

The bill, he added, would give employees more flexibility and agency
when considering other employment opportunities.

Tatum, the lighting designer who reached a legal settlement with his
former employer to keep working in his profession, said, "I just
don't think anyone like me should have to go through that again."

Subscribe to the CEO Daily newsletter to get the CEO perspective on
the biggest headlines in business. Sign up for free.

Most popular Success articles

  * Success
    Employees who violate Amazon's return-to-office mandate will be
    blocked from promotions: 'Your manager will be made...
     
    [yH5BAEAAAA][GettyImage]
    BYSteve Mollman
  * Success
    America's public schools are on their last legs: The proportion
    of students attending a school with 'chronic...
     
    [yH5BAEAAAA][GettyImage]
    BYChloe Berger
  * Success
    Employers are cutting white-collar benefits as they face higher
    costs--but they'll do anything to keep working parents...
     
    [yH5BAEAAAA][GettyImage]
    BYIrina Ivanova

Rankings

  * 40 Under 40
  * 100 Best Companies
  * Fortune 500
  * Global 500

  * Most Powerful Women
  * World's Greatest Leaders
  * World's Most Admired Companies
  * See All Rankings

Sections

  * Finance
  * Leadership
  * Success
  * Tech

  * Asia
  * Europe
  * Environment
  * Fortune Crypto

  * Health
  * Well
  * Retail
  * Lifestyle
  * Politics

  * Newsletters
  * Magazine
  * Features
  * Commentary

  * MPW
  * CEO Initiative
  * Conferences
  * Personal Finance
  * Recommends

Customer Support

  * Frequently Asked Questions
  * Customer Service Portal
  * Privacy Policy
  * Terms of Use
  * Single Issues for Purchase
  * International Print

Commercial Services

  * Fortune Brand Studio
  * Fortune Analytics
  * Fortune Conferences
  * Advertising
  * Business Development

About Us

  * About Us
  * Editorial Calendar
  * Work at Fortune
  * Behavioral Advertising Notice
  * Terms and Conditions
  * Site Map

(c) 2023 Fortune Media IP Limited. All Rights Reserved. Use of this
site constitutes acceptance of our Terms of Use and Privacy Policy |
CA Notice at Collection and Privacy Notice | Do Not Sell/Share My
Personal Information | Ad Choices 
FORTUNE is a trademark of Fortune Media IP Limited, registered in the
U.S. and other countries. FORTUNE may receive compensation for some
links to products and services on this website. Offers may be subject
to change without notice.
S&P Index data is the property of Chicago Mercantile Exchange Inc.
and its licensors. All rights reserved. Terms & Conditions. Powered
and implemented by Interactive Data Managed Solutions.

  *  
  *  
  *  
  *  
  *